Cross Margin
Cross margin uses the entire balance in your margin account to maintain open positions. This means that if one position goes negative, available funds can be automatically used to support it.
✅ Advantages:
1️⃣ Reduces the risk of liquidation as the entire account balance is used.
2️⃣ The ability to offset losses on one trade with profits from another.
3️⃣ Suitable for long-term strategies.
❌️ Disadvantages:
1️⃣ High risk of losing the entire balance if the market moves sharply against you.
2️⃣ Less control over individual positions.
Isolated Margin
Isolated margin limits risk to a single specific trade. If the position incurs a loss, the trader only loses the funds allocated for it, not the entire deposit.
✅ Advantages:
1️⃣ Risk control – loss is limited to the amount allocated for the trade.
2️⃣ Convenient for short-term trading and highly volatile assets.
3️⃣ Allows for effective management of different positions independently.
❌️ Disadvantages:
1️⃣ If margin is not replenished, liquidation can occur faster.
2️⃣ Requires more careful risk management and monitoring of positions.
What to choose?
For beginners and short-term traders, isolated margin is better – it helps limit losses and prevents losing the entire capital.
For experienced traders and those using complex strategies, cross margin can be more beneficial as it reduces the likelihood of liquidation with proper management.